Credit deflation and the reflation cycle to come (part 2)

[Hancock]

18 minutes ago, macca said:

we can count to 130'000 dead.. we are an island.. Bojo is a mass murdering corrupt criminal who is bankrupting the country and stealing all the money

 

Yes but at least they saved the same amount of lives by eradicating the flu. 130k dead from Covid my arse.

[JMD]

On 22/05/2021 at 22:11, MrXxxx said:

Some useful content/pointers for the forthcoming BK?

 

Interesting what he says about companies that issue 'convertible bond' debt, because in his experience such companies ultimately eventually fail and so are a bad risk. But is this true?                                                                                 The main difference, as far as I can see, between corporate bonds and convertible bonds is that convertibles give the company the option of exchanging their bond debt for new created shares, effectively enabling the company to do a  limited and opaque share dilution. I assume that such 'bond conversions' are made known in the next annual report so can't remain a secret.                                                                                                         I get the flexibility for the company for them to issue convertible bonds, but if additionally these are a good indicator for the retail investor to 'stay away' from buying shares in such high risk  companies, is there I wonder a centralised list of names of companies that have previously issued/outstanding convertible bonds? I guess individual company annual reports contain this type of info. but is there a single place to locate this data? I may have misunderstood the above video, so comments from bond experts would be greatly appreciated. 

[JMD]

4 hours ago, Transistor Man said:

 

I'm intrigued what the 'other renewables' might be?... I hear David Cameron has begun lobbying on behalf of a 'Mr' Soylent Green, just saying!!

[Lightscribe]

9 hours ago, planit said:

a) Looks like something magic happens in 2025, anyone got any idea what it is? Covid2?

 

Yes, in 2025 a solar flare wipes out the 2/3rds of the world’s population. The silver lining as you can see there in the chart, is that radiation winds and solar power give out more energy that ever before! 

[MrXxxx]

6 hours ago, JMD said:

The main difference, as far as I can see, between corporate bonds and convertible bonds is that convertibles give the company the option of exchanging their bond debt for new created shares, effectively enabling the company to do a  limited and opaque share dilution.

But it gives the buyer the ability to cover a short without having to a) own the shares, and b) buy them at a higher price if the short goes wrong.

[BurntBread]

5 hours ago, JMD said:

I'm intrigued what the 'other renewables' might be?... I hear David Cameron has begun lobbying on behalf of a 'Mr' Soylent Green, just saying!!

It will probably be steam generated from the tears and anger of retail green-energy investors.

More seriously, the only obvious one missing is tidal energy ... unless there is a miracle and fusion comes on-line (I know it should be "nuclear", and it's not really renewable, but if there is enough fuel, then it might be thought of that way).

[Transistor Man]

5 hours ago, JMD said:

I'm intrigued what the 'other renewables' might be?... I hear David Cameron has begun lobbying on behalf of a 'Mr' Soylent Green, just saying!!

“Other renewables include concentrating solar power, geothermal, and ocean power.”

[geordie_lurch]

1 hour ago, Lightscribe said:

Yes, in 2025 a solar flare wipes out the 2/3rds of the world’s population. The silver lining as you can see there in the chart, is that radiation winds and solar power give out more energy that ever before! 

Did you see ever see the deagel.com/forecast for 2025 made years before Covid then only recently taken down

[Barnsey]

https://www.theguardian.com/money/2021/may/22/uk-savers-interest-rates-up-lows-banks

"Savings rates are creeping up from their all-time lows, providing a “spark of hope” for those looking for a better return on their cash, say analysts.

At the start of the new tax year in April, the best one-year fixed-rate savings account in the market paid interest of 0.65% but savers can now earn up to 0.85%, says Sarah Coles, a personal finance analyst at the investment firm Hargreaves Lansdown."

Yet another subtle but perhaps significant indicator of having passed the low? (with a bull**** narrative attached as to not scare anyone of course) 

[Castlevania]

8 hours ago, JMD said:

Interesting what he says about companies that issue 'convertible bond' debt, because in his experience such companies ultimately eventually fail and so are a bad risk. But is this true?                                                                                 The main difference, as far as I can see, between corporate bonds and convertible bonds is that convertibles give the company the option of exchanging their bond debt for new created shares, effectively enabling the company to do a  limited and opaque share dilution. I assume that such 'bond conversions' are made known in the next annual report so can't remain a secret.                                                                                                         I get the flexibility for the company for them to issue convertible bonds, but if additionally these are a good indicator for the retail investor to 'stay away' from buying shares in such high risk  companies, is there I wonder a centralised list of names of companies that have previously issued/outstanding convertible bonds? I guess individual company annual reports contain this type of info. but is there a single place to locate this data? I may have misunderstood the above video, so comments from bond experts would be greatly appreciated. 

Bloomberg Terminal would Have that data

It’s probably available elsewhere too

[Castlevania]

2 hours ago, MrXxxx said:

But it gives the buyer the ability to cover a short without having to a) own the shares, and b) buy them at a higher price if the short goes wrong.

Short the shares. Use the cash received to buy the convertible bond. Pocket the coupon. 

[jamtomorrow]

Used car market dislocating? - https://cardealermagazine.co.uk/publish/used-car-dealers-are-buying-stock-from-cazoo-website-cheaper-than-crazy-auction-prices/223775

Used car dealers are buying stock from Cazoo website cheaper than crazy auction prices

Dealers have turned to buying stock from online used car retailer Cazoo as auction prices continue to climb higher.

Two have told Car Dealer how they saw cars advertised at Cap Clean prices on the Cazoo website while similar models were selling at auction for thousands of pounds more.

Chris Middlehurst, of Middlehurst Garage in St Helens, posted about buying stock from Cazoo on Facebook after he found a Nissan X-Trail slashed in price by the online-only retailer and advertised at thousands of pounds below today’s retail value.

 

‘We’re in a crazy market where the consumer can buy a car cheaper than the trade can,’ he told Car Dealer. 

Middlehurst Garage specialises in used Nissans but, like the rest of the industry, has found auction prices are spiralling out of control so has begun looking at other options to source stock. 

 

Middlehurst said: ‘I was just looking around for stock. I’ve been trying to buy little and often because I just don’t think the cars are worth what we’re seeing in the auctions. 

‘We specialise in used Nissan and I’d seen an 18-plate Qashqai with 20,000 miles going through the auction for £2,500 over book – and that had already increased in May by £500 on Cap.

 

‘I thought I’d have struggled to sell it at that much. 

‘I ended up buying the car [from Cazoo] for a bit of a laugh. I saw the car advertised on Facebook and clicked through to see it was a seven-seater, one-owner with 15,000 miles and I thought, what’s the catch?

‘I did a check on it, it’s price was Cap Clean and I could have it delivered to my house for free.’

 

Middlehurst pointed out that Cazoo aren’t the only retailers he’s seen with cars advertised with low retail prices, citing other car supermarkets as also offering some stock at ready to retail trade prices in the current market.

He’s also not alone in buying from Cazoo, with one other dealer group boss telling Car Dealer he’d instructed his used car buying team to look at the website. 

The second dealer – who did not want to be named – said he spotted a VW Golf that was advertised at Cap Clean price, but he knows these models are selling for well in excess of that on forecourts.

He said: ‘It’s crazy that I can go on to the Cazoo website and buy one of their cars knowing that I can sell it for more.

‘Who is doing the pricing? The Golf I spotted has been on there since October and the price is way too cheap – I’ll buy it and sell it for way more.’

Head of valuations at Cap HPI Derren Martin said that he had heard similar stories, with one car supermarket having had an offer to buy all models it had in stock of a certain profile by a franchise dealer. However, they refused to sell.

He said: ‘I know there are a lot of dealers looking on retail websites as they would normally do and buying from private advertisers.

‘At the moment many retailers are advertising cars that they bought when trade prices were cheaper, so when it comes to replacing those cars they won’t be able to do that for anywhere near what they paid for them a few weeks ago.’

Cazana director of insight Rupert Pontin echoed this, and said that in these cases it’s likely these dealers have become ‘a victim of their own policies’.

He said: ‘I think some of this comes down to stocking procedures at some dealerships. Dealers have stocking policies where if a car has been in stock for so many days they’ll knock the price down until it sells.

‘I’m not surprised it’s happening, but I think it’s probably happening in less volume than these Facebook posts would lead us to believe.

‘Cazoo are pretty good with their pricing, to be honest, they are competitive and they look at a variety of different data sets including our own.

‘If you look at the original price it is still a bit lower than where we see the market but for the days in stock then I would expect them to do that under whatever stock turn policy they have in place.’

[Cosmic]

7 minutes ago, jamtomorrow said:

Used car market dislocating? - https://cardealermagazine.co.uk/publish/used-car-dealers-are-buying-stock-from-cazoo-website-cheaper-than-crazy-auction-prices/223775

Is that an advert for Cazoo?

[King Penda]

15 hours ago, macca said:

There have been 3 labour governments in 121 years.. 

This Labour bad with the economy is brain washing.. There is fuck all evidence that its true.. 

The truth is Conservatives are bad with the economy unless you are part of the 1%

Labour rebuilt Britain after WW2 creating all our social housing, NHS, social care, public schools, national infrastructure.. 

Since then Tories have spent every year since selling it to they're mates and stealing all of the money..  

Tough on crime!

Last year 97% of all rapists walked free. 22'000 police gone, 23'500 back of house staff gone, 500 police stations closed.

Tough on immigration!

2019 there was record non EU immigration

Good with the NHS!

Record high increases of private companies operating NHS services.. Record high waiting times for operations and gp appointments.. 

Tories are corrupt cunts.  I have 500 pages of Tory corruption that I vomit over the Internet on a daily basis trying to un brain wash the dickheads.. 

So please don't even bother trying to reply because your just wrong if u voted Tory 😁

It's not an opinion.. its a fact.. 

 

I vote Tory because I’m a cunt I wanted out of Europe because I’m a cunt.I simply don’t give a fuck .even things like the Covid jab I’m avoiding because I’m a cunt and I want to see how the cunts make me have it.I’m such a cunt I’m quite happy to vote against things that it would be in my own interest to vote for.I even like being a cunt on Facebook and goading people about Covid brexit imigrents BLM .but at least I’m honest about the fact I’m a bit of a cunt 

[King Penda]

11 hours ago, macca said:

we can count to 130'000 dead.. we are an island.. Bojo is a mass murdering corrupt criminal who is bankrupting the country and stealing all the money

Vietnam 42 dead, population 96.4 million

Taiwan 23 dead population 23.5 million 

new Zealand 26 dead population 4.9 million

It was so easy to stop Covid, but Tories are corrupt and have made billions of £s from it. If you vote for them.. you are the problem. I will say no more on this page..

It’s not all bad most of the country got a 12 month holiday out of it some are up to 15 

[JMD]

3 hours ago, MrXxxx said:

But it gives the buyer the ability to cover a short without having to a) own the shares, and b) buy them at a higher price if the short goes wrong.

Thanks MrXxxx, but i should have mentioned that the reason for my question was really in regard to the risk perspective. You see I am trying to narrow down my 'BK shopping list' of companies, and company debt is something i struggle with judging adequately, so thought convertible bond issuance could be used as one of my 'bad company metrics', if that is the guy in the video is correct in stating its a good signal of a failing company. I'm also thinking that particular debt factor might appear to be a bit niche, but was asking just in case that info. can be easily accessed/found.    

 

[JMD]

2 hours ago, Castlevania said:

Bloomberg Terminal would Have that data

It’s probably available elsewhere too

Yes but $24k/annum, ouch!!

[DurhamBorn]

Looking at the long bond now and Fed action,its likely all bubble investments are now in structural bear markets.Big tech and crypto down by very large percentages over the cycle both macro and legislation/anti trust etc.Crypto mostly down 90% from here i expect,some 99%.There will be some big bear market rallies to suck people back in,especially inexperienced younger people etc,only to then remove all their capital at the start of a reflation,ouch.

Owning investments with low underlying real assets ,or no underlying assets is about the worst positioning you could have at this point given we have entered a rebuild economy backbone cycle.

Just my opinion,not trading advice etc.

[VeryMeanReversion]

 

Received this from my electricity supplier (Bulb) this morning.

"Unfortunately, the wholesale cost of energy has continued to rise dramatically since we last decided to change our prices in March. It's up by 29% since then and is double what it cost this time last year. This means that we need to raise our prices on 21 June."

Solar panels are already on order, due to be fitted in June.  Just waiting for DNO approval for a 5+kW system.  I've done my sums that show a 13 year payback at last years electricity prices, looks like it will pay back sooner than that now.  

My equity sell-limit orders are slowly being filled as they hit targets, just going to be left with miners, energy, utilities, tobacco and PMs soon. Cash is building up nicely ready for "events" at the risk of being eroded by inflation whilst I wait.

Personally, I'm coming round to the idea that energy will be the new money.

My audiobook recommendation of the week is "When Money Dies", written in 1975 about the Weimar collapse.  (£3 on amazon audiobooks). It describes the endless money printing that Germany did to meet the reparations bill.   Anyone with real assets was fine, everyone else was stuffed.  When they have to print, they print.

Eventually, it comes down to trust.  Money only works when you trust it. When that trust is gone, the system can only restart with something trustworthy.  I've not trusted fiat currencies since the early 2000's when I saw what the central banks were doing.  I only trusted them before then because I didn't know what they did!

I guess all those PHDs at the central banks haven't got a "trust" variable in their models.  I'll give them a clue...... If print = 1, trust = 0.

P.S. Lesson of last week was that its not easy to sell shares in something listed on the FTSE All Share index when you are trying to sell 10% of the daily volume, even though it was "only" £20K. My triggers were hit but wouldn't complete as no buyers on the other end, couldn't even get an "at market" price. Going to be interesting getting rid of that one.

 

 

 

 

[JMD]

1 hour ago, jamtomorrow said:

Used car market dislocating? - https://cardealermagazine.co.uk/publish/used-car-dealers-are-buying-stock-from-cazoo-website-cheaper-than-crazy-auction-prices/223775

Used car dealers are buying stock from Cazoo website cheaper than crazy auction prices

Dealers have turned to buying stock from online used car retailer Cazoo as auction prices continue to climb higher.

Two have told Car Dealer how they saw cars advertised at Cap Clean prices on the Cazoo website while similar models were selling at auction for thousands of pounds more.

Chris Middlehurst, of Middlehurst Garage in St Helens, posted about buying stock from Cazoo on Facebook after he found a Nissan X-Trail slashed in price by the online-only retailer and advertised at thousands of pounds below today’s retail value.

 

‘We’re in a crazy market where the consumer can buy a car cheaper than the trade can,’ he told Car Dealer. 

Middlehurst Garage specialises in used Nissans but, like the rest of the industry, has found auction prices are spiralling out of control so has begun looking at other options to source stock. 

 

Middlehurst said: ‘I was just looking around for stock. I’ve been trying to buy little and often because I just don’t think the cars are worth what we’re seeing in the auctions. 

‘We specialise in used Nissan and I’d seen an 18-plate Qashqai with 20,000 miles going through the auction for £2,500 over book – and that had already increased in May by £500 on Cap.

 

‘I thought I’d have struggled to sell it at that much. 

‘I ended up buying the car [from Cazoo] for a bit of a laugh. I saw the car advertised on Facebook and clicked through to see it was a seven-seater, one-owner with 15,000 miles and I thought, what’s the catch?

‘I did a check on it, it’s price was Cap Clean and I could have it delivered to my house for free.’

 

Middlehurst pointed out that Cazoo aren’t the only retailers he’s seen with cars advertised with low retail prices, citing other car supermarkets as also offering some stock at ready to retail trade prices in the current market.

He’s also not alone in buying from Cazoo, with one other dealer group boss telling Car Dealer he’d instructed his used car buying team to look at the website. 

The second dealer – who did not want to be named – said he spotted a VW Golf that was advertised at Cap Clean price, but he knows these models are selling for well in excess of that on forecourts.

He said: ‘It’s crazy that I can go on to the Cazoo website and buy one of their cars knowing that I can sell it for more.

‘Who is doing the pricing? The Golf I spotted has been on there since October and the price is way too cheap – I’ll buy it and sell it for way more.’

Head of valuations at Cap HPI Derren Martin said that he had heard similar stories, with one car supermarket having had an offer to buy all models it had in stock of a certain profile by a franchise dealer. However, they refused to sell.

He said: ‘I know there are a lot of dealers looking on retail websites as they would normally do and buying from private advertisers.

‘At the moment many retailers are advertising cars that they bought when trade prices were cheaper, so when it comes to replacing those cars they won’t be able to do that for anywhere near what they paid for them a few weeks ago.’

Cazana director of insight Rupert Pontin echoed this, and said that in these cases it’s likely these dealers have become ‘a victim of their own policies’.

He said: ‘I think some of this comes down to stocking procedures at some dealerships. Dealers have stocking policies where if a car has been in stock for so many days they’ll knock the price down until it sells.

‘I’m not surprised it’s happening, but I think it’s probably happening in less volume than these Facebook posts would lead us to believe.

‘Cazoo are pretty good with their pricing, to be honest, they are competitive and they look at a variety of different data sets including our own.

‘If you look at the original price it is still a bit lower than where we see the market but for the days in stock then I would expect them to do that under whatever stock turn policy they have in place.’

Will Cazoo become another 'Amazon'? Are car dealers days numbered? I hadn't thought about car dealers becoming just another 'retail casualty' statistic, along with the demise of the corner shop/supermarket checkout assistant, etc.

More and more market/business concentration happening. Wont be long before we get that 'RoboCop dystopian vision' of just having several companies doing everything, a la MegaCorp... i know, i know - we are well on our way to that reality happening. 

I notice that Cazoo boss may float his 2-year old company for $8Bn. Plus he is a new entrant to this years Sunday Times Rich List.

[Castlevania]

8 minutes ago, VeryMeanReversion said:

 

Received this from my electricity supplier (Bulb) this morning.

"Unfortunately, the wholesale cost of energy has continued to rise dramatically since we last decided to change our prices in March. It's up by 29% since then and is double what it cost this time last year. This means that we need to raise our prices on 21 June."

Solar panels are already on order, due to be fitted in June.  Just waiting for DNO approval for a 5+kW system.  I've done my sums that show a 13 year payback at last years electricity prices, looks like it will pay back sooner than that now.  

My equity sell-limit orders are slowly being filled as they hit targets, just going to be left with miners, energy, utilities, tobacco and PMs soon. Cash is building up nicely ready for "events" at the risk of being eroded by inflation whilst I wait.

Personally, I'm coming round to the idea that energy will be the new money.

My audiobook recommendation of the week is "When Money Dies", written in 1975 about the Weimar collapse.  (£3 on amazon audiobooks). It describes the endless money printing that Germany did to meet the reparations bill.   Anyone with real assets was fine, everyone else was stuffed.  When they have to print, they print.

Eventually, it comes down to trust.  Money only works when you trust it. When that trust is gone, the system can only restart with something trustworthy.  I've not trusted fiat currencies since the early 2000's when I saw what the central banks were doing.  I only trusted them before then because I didn't know what they did!

I guess all those PHDs at the central banks haven't got a "trust" variable in their models.  I'll give them a clue...... If print = 1, trust = 0.

P.S. Lesson of last week was that its not easy to sell shares in something listed on the FTSE All Share index when you are trying to sell 10% of the daily volume, even though it was "only" £20K. My triggers were hit but wouldn't complete as no buyers on the other end, couldn't even get an "at market" price. Going to be interesting getting rid of that one.

 

 

 

 

What share was that? All shares should have a lot size for which the market makers price is valid. If you’re trying to sell more than that then they can offer you less.

[JMD]

1 hour ago, stokiescum said:

I vote Tory because I’m a cunt I wanted out of Europe because I’m a cunt.I simply don’t give a fuck .even things like the Covid jab I’m avoiding because I’m a cunt and I want to see how the cunts make me have it.I’m such a cunt I’m quite happy to vote against things that it would be in my own interest to vote for.I even like being a cunt on Facebook and goading people about Covid brexit imigrents BLM. but at least I’m honest about the fact I’m a bit of a cunt 

Hear, hear and well said (!?!... well kinda!!) Stokiescum. 

(What i mean is my old Mum always used to say 'honesty is the best policy', she just wouldn't have phrased it quiet like you have)

[VeryMeanReversion]

22 minutes ago, Castlevania said:

What share was that? All shares should have a lot size for which the market makers price is valid. If you’re trying to sell more than that then they can offer you less.

SUPP - Schroder Public Private (the old Woodford one).  I bought it after it crashed, made some profit after it bounced but the recent NAV reduction and move to value stocks looks like it has little upside now. I will be down 10% overall.

I tried to sell a smaller amount but that didn't help.  I've just put a sell-limit order on just below the NAV and will wait.

[Starsend]

1 hour ago, VeryMeanReversion said:

 

Received this from my electricity supplier (Bulb) this morning.

"Unfortunately, the wholesale cost of energy has continued to rise dramatically since we last decided to change our prices in March. It's up by 29% since then and is double what it cost this time last year. This means that we need to raise our prices on 21 June."

Solar panels are already on order, due to be fitted in June.  Just waiting for DNO approval for a 5+kW system.  I've done my sums that show a 13 year payback at last years electricity prices, looks like it will pay back sooner than that now.  

My equity sell-limit orders are slowly being filled as they hit targets, just going to be left with miners, energy, utilities, tobacco and PMs soon. Cash is building up nicely ready for "events" at the risk of being eroded by inflation whilst I wait.

Personally, I'm coming round to the idea that energy will be the new money.

My audiobook recommendation of the week is "When Money Dies", written in 1975 about the Weimar collapse.  (£3 on amazon audiobooks). It describes the endless money printing that Germany did to meet the reparations bill.   Anyone with real assets was fine, everyone else was stuffed.  When they have to print, they print.

Eventually, it comes down to trust.  Money only works when you trust it. When that trust is gone, the system can only restart with something trustworthy.  I've not trusted fiat currencies since the early 2000's when I saw what the central banks were doing.  I only trusted them before then because I didn't know what they did!

I guess all those PHDs at the central banks haven't got a "trust" variable in their models.  I'll give them a clue...... If print = 1, trust = 0.

P.S. Lesson of last week was that its not easy to sell shares in something listed on the FTSE All Share index when you are trying to sell 10% of the daily volume, even though it was "only" £20K. My triggers were hit but wouldn't complete as no buyers on the other end, couldn't even get an "at market" price. Going to be interesting getting rid of that one.

 

 

 

 

I've had the same from Bulb as well. On top of the rise a couple of months back my electric is up about 20% this year.

Anybody else had price rises recently or is it just Bulb pulling a fast one?

[DurhamBorn]

36 minutes ago, Starsend said:

I've had the same from Bulb as well. On top of the rise a couple of months back my electric is up about 20% this year.

Anybody else had price rises recently or is it just Bulb pulling a fast one?

Iv just been checking as my fix runs out in July and its a big jump.Luckily buying DRAX in the collapse and selling a lot of it now has paid my gas and electric bill until im 72,or 64 if we get another 65% inflation  .Wait until people start to link windmills etc to them being shafted.All these input costs rising and rising nd the BOE thinks its all a blip.